⇒ U.S. stock indexes closed slightly lower on Friday, but recorded solid weekly gains. The Dow Jones Industrial Average broke its six-day winning streak, closing 1.47 points lower at 16,478.41. The Dow still posted its second straight weekly gain, adding 1.6% over the week. The SandP 500 closed marginally lower at 1,841.40, though it rose 1.3% for the week. The Nasdaq Composite shed 10.59 points, or 0.3%, to 4,156.59, but it gained 1.3% for the week – Source: Marketwatch

⇒ The yen dropped to five-year lows against the dollar on Monday, extending losses to more than 17 percent for the year on a mix of improving sentiment on the global economy, rising investor risk appetite and expectations of more central bank stimulus. The dollar stood at 105.28 yen, having risen to 105.37 yen in early Asian trade, its highest level since October 2008. The euro stood at 144.80 yen, having hit a five-year high of 145.675 yen on Friday. The Swiss franc rose above 118 yen, to be at its highest in more than 30 years – Source: Reuters

⇒ BlackRock Inc., the world’s biggest money manager, sees Australia’s dollar falling 10 percent as disappointing economic growth forces the central bank to cut its benchmark rate to as low as 2 percent. The Aussie will drop toward 80 U.S. cents from 88.60 cents as of 11:30 a.m. in Sydney, said Stephen Miller, a money manager in Sydney at BlackRock, which oversees $4.1 trillion worldwide. The Reserve Bank of Australia may lower its cash target from a record-low 2.5 percent in April and cut again in August as output stalls at a below-trend pace, he said – Source: Bloomberg

⇒ The dollar touched a five-year high versus the yen and headed for an annual gain against major peers amid optimism a sustained U.S. economic recovery will allow the Federal Reserve to cease bond purchases by the end of 2014. The Bloomberg U.S. Dollar Index is set for its biggest annual advance in five years before reports this week that may show gains in the housing market and a continued expansion in manufacturing. The euro is on course for a world-beating gain in 2013. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major counterparts, has risen 3.8 percent this year, the most since an 8.9 percent advance in 2008 – Source: Bloomberg

⇒ The pound rose the most in two months against the dollar this week as confidence in Britain’s economic recovery was boosted by a revival in the housing market and falling unemployment. Sterling advanced versus all but two of its 16 major counterparts before reports next week that economists said will show U.K. home prices increased this month and mortgage approvals climbed in November. Britain’s government bonds fell, pushing 10-year yields above 3 percent for the first time since September, as the Treasury said it’s considering making it easier for new banks and alternative finance providers to lend to smaller companies. The pound rose 1 percent this week to $1.6495 as of 5:25 p.m. yesterday in London, the biggest gain since the period ended Oct. 18. The currency climbed to $1.6578 yesterday, the highest since August 2011. Sterling gained 0.3 percent to 83.46 pence per euro after appreciating to 82.53 pence on Dec. 2, the strongest since Jan. 11 – Source: Bloomberg

⇒ Australia’s dollar headed for its biggest yearly decline since 2008 as signs of improvement in U.S. economy boosted expectations the Federal Reserve will continue to scale back stimulus that has debased the greenback. The Aussie dollar weakened, extending the worst weekly run of losses in more than three decades before data which may show expansion in Chinese manufacturing slowed. The Australian currency weakened 0.4 percent to 88.37 U.S. cents as of 12:51 p.m. in Sydney from Dec. 27, when it capped a 10th consecutive weekly decline, the longest losing streak since exchange controls were scrapped in 1983. The Aussie has fallen 15 percent this year, the sharpest drop since 2008 – Source: Bloomberg

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